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The Doable Dozen

National health care? Demolition and reconstruction of the tax code? A comprehensive war on poverty? Well, maybe not -- yet. But if the pollsters are right and Election 2006 proves to be a dark day for the right and a bright dawn for the left, there's plenty that a renewed progressive majority could enact immediately. Herewith are a dozen doable ideas, most of them languishing in Congress right now, many of them poised to tip onto the floor and into the lawbooks if a more liberal leadership began scheduling votes.

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Watch Your Assets

The Problem: Income inequality

The Solution(s): Savings accounts at birth, mandated 401(k)s

Social security privatization is dead, and rightly so, but the general idea of using public policy to broaden the ownership of assets is still a good idea and, if done right, could help keep a lid on America's burgeoning income inequality and comically low savings rate. The ASPIRE Act, a modification of Tony Blair's “baby bonds” idea developed at the New America Foundation, focuses on the former issue. Somewhat different versions of the legislation have been introduced in the House and Senate, but both involve creating savings accounts in which every child will receive a $500 starter deposit from the government, with children from below-median-income households eligible for additional government contributions of up to $500. After turning 18, the account holder would be able to use the money to pay for college, buy a home, or invest in retirement funds. The Senate version of the bill, sponsored by Democrat Chuck Schumer of New York and Republican Jim DeMint of South Carolina, allows for additional contributions of up to $1,000 per year and up to a $500 match from the government, with the match phasing out at between 100 percent and 105 percent of median income. The House version, sponsored by Harold Ford, Patrick Kennedy, and Phil English is more generous, allowing $2,000 in additional contributions with matches up to $1,000 and a phaseout at between 100 and 200 percent of median income.

Both versions of the proposal are quite modest compared with the scale of asset inequality in America, which is much larger than our very large level of income inequality. Nonetheless, if the framework can be put in place, future Congresses might expand upon the baseline.

An even simpler idea, now being pushed by economists William Gale, Jonathan Gruber, and Peter Orszag under the auspices of the Brookings Institution's Hamilton Project, takes aim at the national savings rate. Under current law, enrolling in an IRA or 401(k) plan requires positive action on an individual's part, action that people frequently don't take either out of inertia or because they find the choices confusing. Research indicates that forcing all firms to automatically enroll their employees in either a defined benefit plan, a 401(k), or an ira and then letting individuals opt out if they don't want to save could dramatically increase participation rates. Gale, Gruber, and Orszag also propose tackling the inequality issue by changing the tax treatment of IRAs and 401(k)s that currently offer much larger benefits to high earners than to working- and middle-class people. They propose replacing the tax preferences enjoyed by those accounts with a 30-percent match from the government for all qualified contributions to level the playing field. More ambitious variants of this idea have also been floated, featuring more generous matches for middle- and working-class people to create genuinely universal, mandatory portable 401(k)-type plans for all Americans.

--Matthew Yglesias

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Witness Protection

The Problem: Indefinite detentions

The Solution: Amend an old law, newly applied

Chances are you've never heard of a 1984 material-witness law that allows the government to lock up individuals who may know things concerning criminal proceedings but -- for whatever reason -- have refused to testify. The statute, which was originally passed to ensure that key witnesses provide information about pending criminal cases even when they don't feel like showing up in court to present what they know, has helped prosecutors in obtaining hard-to-get testimony in court cases over the years, but has never been considered controversial. That changed after September 11, 2001.

“I think someone in the Justice Department said, ‘Hey, we can use this statute more aggressively,'” says a staff member who works for Democratic Senator Patrick Leahy of Vermont. “Here's a statue that lets us arrest somebody and hold them indefinitely.” The material-witness law, she says, was embraced as a “tool in terrorism investigation.”

At that point, according to a June 2005 Human Rights Watch report, “Witness to Abuse,” dozens of men, overwhelmingly Muslim, were held in detention in the United States without charges or accusations for months or, in at least one case, more than a year. Many of the people who were detained under this law watched their businesses go belly-up and their personal lives fall into shambles. Meanwhile, note Human Rights Watch researchers in the report, the Justice Department “tried to hide its use of the material-witness law, refusing to respond to congressional inquiries and keeping courtroom doors closed, records sealed, and material-witness cases off court dockets.”

Leahy has come up with a way to fix the problem. He has proposed legislation that would help make sure the material-witness law is used only in the way that it is intended: “to obtain testimony,” he said in a press statement on January 6, “and not to hold criminal suspects without charge when probable cause is lacking.” The bill would impose time limits, as well as due-process standards, on the detention of material witnesses. “In the current bill, there's nothing on time limits,” says the Senate staffer familiar with the legislation. “There's no end in sight.” If the bill becomes law, there would be.

--Tara McKelvey

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For Richer, For Poorer

The Problem: Tax inequity

The Solution: A not-quite-flat flat tax

National security, family values, gay marriage, and the like have all, at different points, served as effective bludgeons for the right against progressive policy goals. But looking back over the period of conservative ascendancy as a whole, it's fair to say that the biggest club has been the one labeled “taxes.” The Scripture of New Taxes is the one from which they all have read. I'll cut your taxes, George W. Bush said over and over and over in 2000; it's your money, not Washington's.

The promise, of course, carries an implicit allegation: that the Democrats will raise your taxes. It's proven an exceedingly tough charge to answer, and too many Democrats over the years have fallen into the trap of saying, “I'll cut your taxes, too!”

The better answer is that taxes need to be simpler and fairer. Which brings us to Oregon Senator Ron Wyden. His idea is simple enough that it can be communicated to a child, and a far better progressive response than the usual one: Tax wages at the same rate you tax wealth.

Wyden likes to keep things simple. “People are desperate,” he told the Prospect back in February, “for political figures, and especially for Democrats, to talk English -- just plain English.”

The plain-English version of Wyden's Fair Flat Tax Act is as follows. All income, earned (wages) and unearned (capital gains), will be taxed at the same rate -- it's a travesty, Wyden says, “when Warren Buffet pays a lower tax rate than his receptionist.” The current six individual rates will be folded into three -- 15 percent, 25 percent, and 35 percent. The new 1040 will shrink to 30 lines from its current 76. Tens of billions of dollars in tax breaks and loopholes will be eliminated. Lower- and middle-income taxpayers who do not itemize, and therefore get no credit for state and local taxes on their federal returns, will now get a credit.

For selected taxpayers, the Wyden plan would look like this. A single filer with an $18,000 income would go from paying $1,004 to getting a $162 refund. A head of household making $47,000 would go from paying $611 to getting $2,549. A $90,000-a-year married couple filing jointly would see their bill lowered by $1,581. A single filer earning $100,000 would see a $1,591 reduction. Not until we get up into the rarefied air of $275,000 earners does the tax bill go up, from $55,510 to $58,265.

Wyden's plan will run into political trouble even with senators from his own party who represent states where higher percentages of residents -- wealthy people, retirees, or both -- live off investment income (New York, California, Florida, Arizona). But the problem of moderate-income retirees seems like one that could be easily finessed. And the allure of a plain-English plan that helps working people should be apparent to the leaders of a party that has been losing tax arguments for 25 years.

--Michael Tomasky

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Rush to Peace

The Problem: Global conflict resolution in crisis

The Solution: U.N. Emergency Peace Service

When global crises demand a United Nations peacekeeping force, it is up to the secretary general to cajole member countries to commit troops and funds. Kofi Annan likens this part of his job to a fire chief who must beg for trucks and volunteers to put out a fire. Inevitably, too few blue helmets are deployed months too late. By the time peacekeepers arrive, the conflict has spiraled out of control, countless lives have been lost, and the costs of maintaining security and rebuilding have increased manifold.

Enter the United Nations Emergency Peace Service (UNEPS), a rapid-response service designed to intervene in emerging crises. Legislation proposed by Maryland Democrat Albert Wynn, and co-sponsored by the soon-to-retire Republican Jim Leach of Iowa, supports creating a 10,000- to 15,000-strong multinational UNEPS force comprising military personnel, police officers, medical workers, engineers, and other legal and technical advisers. “Think of it as a global 911 service,” says Don Kraus, executive vice president of Citizens for Global Solutions. Before natural disasters turn into large-scale humanitarian emergencies, and before local conflicts morph into civil or regional wars, this force would be tapped to prevent a crisis from escalating into catastrophe.

Wynn estimates that UNEPS would cost the U.N. $2 billion to create and less than $1 billion per year to sustain. For the international community, and especially for the United States, this would be a bargain: According to the Carnegie Commission on Preventing Deadly Conflict, donor countries could have saved $130 billion of the $200 billion they spent on conflict management in the 1990s if they'd focused on conflict prevention rather than post-conflict reconstruction.

The ultimate purpose of this legislation is not to appropriate U.S. dollars to create the UNEPS. Rather, Wynn is promoting a concept that has been kicking around in academia and nongovernmental organizations for the past five years in hopes that a U.S. President (probably not this one) will take notice and push the idea at the United Nations.

--Mark Goldberg

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Patently Absurd

The Problem: Big PHarMa stiffs consumers

The Solution: Reform the Patent and Trademark Office

Twenty-first century America is awash in patent applications -- about 460,000 in 2005, way up from 178,083 in 1991. If this represented a genuine tripling of the pace of innovation, it would be a good thing.

Too bad. Mostly it represents not an innovation boom but a massive increase in the incentives being offered to apply for largely spurious patents. The main culprit was a 1991 reform depriving the U.S. Patent and Trademark Office of taxpayer support and instead forcing it to depend for its funding on user fees generated by its own activities. The idea wasn't obviously absurd -- the logic was that users ought to pay for the privilege of registering and, besides, there were enough applications to make the office profitable -- but the consequences have been perverse: Because each new application brings in a $380 fee, the institution has a strong incentive to gin up business by signaling that it will take a friendly view of its “customers'” applications. Worse, each new application that gets approved generates more than $3,000 in annual maintenance fees.

Predictably, the result has been an ever-more-permissive attitude toward new applicants. A 2002 study from Cornerstone Research, a litigation-consulting firm, indicated that 86 percent of applications were approved in 2000, way up from 69 percent in 1984, when the number of requests was also much lower.

Even absent these incentives, examiners have little ability to do their jobs properly since Congress has started siphoning money from the patent fees away from the Patent Office to subsidize the rest of the government. Consequently, the ratio of applications to examiners has risen steadily even as the complexity of the work has increased. The job requires specialized skills, but salaries are low compared to the private sector. Thus, examiners frequently leave for more lucrative work after a few years on the job, denying the office experienced examiners, rendering young examiners disinclined to alienate potential employers, and arming applicants with detailed insider knowledge of the process' weaknesses.

The result has been an upshot in mischief. “Patent trolls” secure ownership over loosely conceived inventions they have no intention of marketing, hoping to score big down the road either in licensing fees or legal settlements when someone with a real product independently hits upon the same thing. Alternatively, companies assert that they've done research that never took place, or seek to patent ideas already in wide circulation.

The real upshot: The situation is a drag for consumers who wind up paying higher prices for products that, due to the government-sponsored patent monopoly, face no real market competition. It's also begun to aggravate significant elements of the business community. Other corporate actors, however, and most crucially the pharmaceutical industry, like the status quo just fine (among other things, it helps them patent “new” versions of essentially the same drugs and stifle competition from cheaper generic alternatives) and so far have stifled various efforts at reform.

A bill from House Democrats Howard Berman and Rick Boucher would offer some reforms to the system -- making it easier to challenge pending applications and wrongfully granted ones, and harder for patent trolls to obtain permanent injunctions, though to save money it fails to address the underlying patent-fee issue. Unfortunately, the prospects for even modest reform look bleak, no matter what happens in November. “The pharmaceutical companies buy everyone,” remarks Dan Ravicher from the Public Patent Foundation.

--Matthew Yglesias

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The Drug War

The Problem: The Medicare drug benefit

The Solution: Let Medicare negotiate

The Medicare prescription drug benefit has been a boondoggle. to be fair, there was plenty of foreshadowing for this film: Watching George W. Bush and the pharmaceutical companies demand a massive new Medicare expansion to help seniors purchase drugs made for a fairly unsettling opening sequence. And when then-reigning Tom DeLay had to extend the vote an unprecedented three hours to wrench enough arms to pass the bill, the movie turned downright scary.

The problem with the benefit is that it farms out pharmaceutical negotiations to a variety of small insurers, explicitly barring the secretary of Health and Human Services from using Medicare's massive market share to bargain down prices on common drugs. This denies seniors the everyday low prices that have made Canadian reimportation such a hit, and forces them to pay 48 percent more than the Veterans Administration for the very same drugs. Given that Medicare dwarfs both Canada and the VA in market size, a bit of friendly negotiating should allow it to easily match their prices. After all, does Wal-Mart pay more than your local mom-and-pop?

So far as the pharmaceutical companies that compelled the bill were concerned, the high prices are a feature, not a bug. They had stuck their finger into the political winds and assumed, correctly, that a Democratic majority would soon pass a Medicare drug benefit with real bargaining power. So they had their buddy Bush head liberals off at the pass.

Luckily, it's not too late to offer a corrective. Nine senators, some Democrats, some Republicans, have already signed on to an effort that would empower Medicare to centralize its bargaining and extract discounts commensurate with its size. Trouble is, despite some bipartisan support, the Republican majority, bought and paid for by the pharmaceutical industry, is bottling the bill. Change regimes and it sees clear sailing, a journey that economist Dean Baker estimates could save the country between $500 billion and $1 trillion. Now that would be a happy ending.

--Ezra Klein

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Leaving a Legacy

The Problem: Too many to count

The Solution: Health care for hybrids

Three problems: Greenland is melting and the seas are rising; China is industrializing, driving oil and gas prices upward; General Motors is threatened with bankruptcy as its health-care costs go through the roof. To most, these may seem like discrete catastrophes, but Illinois Senator Barack Obama thinks they have a common solution.

Obama has come up with an audacious proposal that has won the backing of enviros and the United Auto Workers (UAW), and should win the support of both the cash-strapped auto industry and motorists suffering from sticker shock. One of the chief problems that General Motors, and, to a lesser degree, Ford and DaimlerChrysler, are facing are their legacy costs -- in particular, paying for the health care of retirees and their spouses. At GM, the nearly half-million retirees and their spouses outnumber the current unionized workforce by roughly 4-to-1. These costs put the older auto companies at a competitive disadvantage with such newer transplant competitors as Toyota, and with automakers from countries where health-care costs are picked up by the government. The cost of a new GM car is on average $1,500 higher due to the health-care obligations it has assumed.

So Obama has authored the Health Care for Hybrids Act, which mandates the government to pick up part of the tab for the auto companies' retiree health-care costs. In return, the companies would be required to invest most of their savings into more fuel-efficient cars. The UAW has embraced the idea, realizing that in the current market-über-alles zeitgeist, the kind of straight bailout offered to Chrysler in the 1970s, stands no chance of enactment. Clearly, enviros like the idea, as should consumers: With gas prices soaring, the appeal of hybrid cars grows greater every day (as the manufacturer of the Prius can attest). Obama's proposal may be characteristic of his work, finding support across class (and other) lines.

--Harold Meyerson

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Bad Credit

The Problem: Usurious credit-card rates

The Solution: Automatic linking to consumer accounts

When John Edwards barnstormed across Iowa in the icy winter of 2004, he lit up rooms and brought audiences to their feet with an impassioned attack on a rarely mentioned entity whose reach extended into the pockets of nearly all his audience members: credit-card companies. At first blush it might have seemed like a small-bore consumer issue, but with the average household possessing 6.3 bank credit cards and 6.3 store credit cards and spending upwards of $800 per year on penalties, interest, and fees, he was onto something.

Credit-card debt for middle-class families jumped 75 percent between 1998 and 2001, according to Demos, a public-policy research organization, helping fuel the explosion in bankruptcy filings in the early 2000s and, eventually, the bankruptcy reform law tightening criteria for absolving individuals of the debts. Card penalty interest rates are now as high as 30 percent to 40 percent. Penalty fees made up 10.9 percent of lender revenues in 2004, up from 9 percent in 2002, and have continued to increase card-issuer profits. A person with $3,000 in debt could, even if he never bought another thing on the card, rack up more than $2,000 in penalties and fees in a single year, making getting out of that debt increasingly difficult. Bringing rates down to less usurious levels could put more money back in the pockets of working families than did the 2001 Bush tax rebate (which yielded up to $300 per person).

Close to two years later, just such a plan has taken its place in the Center for American Progress' (CAP) “15 New Ideas” initiative, relaunched by Edwards' former policy director, Robert Gordon, now a senior vice president at the center; Derek Douglas, the center's associate director for economic policy; and Christian Weller, a senior economist at the center. The CAP team recommends making standard the linking of cards to automated payments from consumer accounts, as in Japan, so as to reduce the late-fee trap, since a substantial portion of the late fees consumers rack up are due to their personal disorganization, rather than inability to pay, coupled with company policies that slam the door on timely payments as early as 10 a.m. on due dates. The CAP team also recommends eliminating the now-standard practice of raising rates -- without announcement and often retroactively, in a policy known as “universal default” -- for individuals based on their use of unrelated cards.

In December 2005, Gordon and Douglas called for these and other changes in The Washington Monthly, arguing for a Credit Card Users' Bill of Rights. In the past, companies would not allow charges past a certain limit; today, they do so and charge stiff “over limit” fees of as much as $35. Returning to the old system, or to a new opt-in system, would eliminate another way credit-card companies now prey on consumers. The battle against abuse of credit-card practices, Gordon and Douglas wrote, would require neither “tax increases or government program expansions.” It would simply require that “progressives honor one of their simplest, noblest commandments: Stand up for regular people.” Reforming the credit-card industry would combine the best of progressive populism with a truly private-sector solution to one major drag on the well-being of America's families.

--Garance Franke-Ruta

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High-Wire Act

The Problem: Wi-Fi shortage

The Solution: Community broadband

March 26, 2004. Boldly seeking to burnish his pro-innovation credentials, President Bush declares his support for “universal, affordable access for broadband technology by the year 2007,” with “plenty of choices” for consumers. When he made that speech, America was ranked 10th in the world for broadband access. Now we're 15th, with only 20 percent of the country enjoying high-speed Internet access in the home. We may have an ownership society, but without widespread access to the Net, we're not going to have an innovative economy.

Happily, forward-looking cities across the nation have begun stepping into the void. In Corpus Christi, Texas, the government created a Wi-Fi network that would streamline its bureaucracies, obviating the need for human meter readers (gas meters would automatically report to central computers) and allowing members of the police force to access crucial data and images from their squad cars. Scottsburg, Indiana, population 6,000, was unable to attract any broadband providers to the town; with two businesses threatening to leave unless the technology situation changed, the government created its own network. In Philadelphia, where 90 percent of the affluent neighborhoods but only 25 percent of low-income neighborhoods have access to broadband, construction is underway on a grid that would make the city one big, low-cost wireless hot spot.

All this was too much for the big telecoms, which spied a looming threat to their profit margins. If the cities were to provide cheap, widely available wireless, who would subscribe to their plans? So they sent their well-muscled lobbying organizations into statehouses across the country, rapidly winning passage of 14 bills barring municipalities from laying down their own wireless infrastructures. Charming.

But the frequencies used for wireless access are, in theory at least, public property, held in trust by the government, for the people. Someone must have clued in New Jersey Senator Frank Lautenberg to the arrangement, as he's now pushing the Community Broadband Act, which would make it illegal for states to pass legislation barring municipalities from offering broadband access. Lest there be fears of public monopolies, the statute also declares that local governments can't discriminate against private broadband companies and expel them from the market. The law, which has largely been ignored in the current Congress, would ensure the public has an array of wireless choices. Just as President Bush promised.

--Ezra Klein

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. Sign on the Dotted Line

The Problem: Languishing unions

The Solution: Import Canadian card check

American unions need a shot in the arm, and there's one waiting just north of the border. Card check, as the Canadian process of enrolling workers in unions is called, is a venerable idea whose time may come if the Democrats retake Congress.

In 1935, the National Labor Relations Act (NLRA) allowed workers to vote in federally supervised elections as to whether they wanted union representation, and millions voted yes. In the decades following World War II, as many as one-third of American workers were union members. Not coincidentally, this was the only period in American history when wages rose in tandem with productivity and when prosperity was broadly shared.

By the 1980s, however, many American employers realized that if they violated the NLRA's election rules -- if they threatened employees who were active in union organizing, for instance -- the penalties would be negligible. Retaliatory tactics eventually became routine. And even if unions actually won the election, employers could appeal through the legal system for years, and refuse to negotiate or sign a first contract. This is one reason why the rate of private-sector unionization over the past 50 years has dwindled from 35 percent to a measly 8 percent.

In time, many unions abandoned the NLRA process altogether, opting instead to compel the employer, through employee, community, and financial pressure, to allow the workers to join the union by the card-check process used in Canada. In card check, once the union submits cards signed by a majority of the employees attesting to their desire to join the union, the company automatically recognizes the union as the bargaining agent.

Considerable union growth has occurred through this process, which is why congressional conservatives make periodic noises about outlawing it. A majority of congressional Democrats and a handful of Republicans, by contrast, have co-sponsored California Congressman George Miller's Employee Free Choice Act (EFCA), which would legalize card check, mandate mediation and binding arbitration if a first contract is not signed within 90 days of the union certification, and increase the penalties for employers who violate the nation's labor law. The efca is indispensable to rebuilding union strength and re-establishing mass prosperity; it should be a high priority for Democrats if they reclaim Congress.

--Harold Meyerson

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Lesson Plan

The Problem: Early education shortfall

The Solution: Universal pre-K

On June 6, Californians get a chance to vote on Proposition 82, sponsored by film director Rob Reiner, which would amend the state constitution to guarantee all residents access to preschool education for their 4-year-old children, to be funded by a tax on the wealthiest 1 percent of state residents. Reiner's campaign has garnered a lot of attention this year -- and not merely due to the controversy surrounding his campaign activities while serving as chairman of a state preschool commission. Proposition 82 marks the latest development in a movement for universal pre-K that has swept across states, including Georgia, Oklahoma, Florida, and New York, in the last decade. Comprehensive federal action to ensure universal pre-K access is the next step.

Decades' worth of empirical research has demonstrated the value of early childhood education in improving brain development and boosting behavioral and learning skills. Particularly for underprivileged populations, these effects are long-lasting: Studies of local programs have shown that children in poor neighborhoods who go through preschool do better in school, are less likely to repeat grades, and are less likely to end up in the justice system than those who don't. These programs are also all the more cost-effective because they prevent developmental problems associated with impoverished, high-stress environments rather than attempting to treat these problems after they appear. (A RAND study last year estimated that every public dollar spent on Reiner's California initiative would yield $2.62 in later economic benefit.) And while the research certainly indicates that poor children receive the greatest benefits from access to good preschools, children across socio-economic groups benefit from early education. This, combined with the long-acknowledged pitfall facing targeted, means-tested social policies (“programs for the poor make for poor programs”), points to the logic of making pre-K access a universal rather than targeted policy.

What might comprehensive federal legislation ensuring universal preschool for all 4- and perhaps 3-year-olds look like? The Committee for Economic Development's 2002 proposal for a national universal pre-K policy called for a federal-to-state matching grant to underwrite state-based preschool systems and a national certification and standards process. Existing federal early childhood development programs -- most notably Head Start -- would be integrated into the new universal preschool system. (Early Head Start, which targets underprivileged 2- and 3-year-olds, could be expanded to augment the system.) Estimates for the total state and federal cost of such a system hover around $35 billion. For progressives, the policy merits of universal preschool are obvious. The politics of it should be clear as well -- not merely its appeal to overworked parents of young kids across the country, but also its potential to incorporate a new population of public-sector workers -- unionized preschool teachers -- into the progressive coalition.

--Sam Rosenfeld

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Matters of Class

Problem: Getting low-income students to college

Solution: Better taxes, loans

The average college graduate lives a healthier and more prosperous life (and is more likely to vote) than the average nongraduate. But the high cost of college means that students from low-income families remain significantly less likely than their better-off peers to enroll, even after adjusting for academic ability. And instead of alleviating this discrepancy, current tax provisions basically reward middle- and higher-income families for sending kids to college.

It's time for some simple reforms that would make a big difference without a big price tag. A report from the Tax Policy Center (TPC), a joint venture of the Urban Institute and Brookings Institution, puts forward just such a plan. In the proposal, two existing, nonrefundable tax credits with confusing eligibility regulations would be combined into one College Opportunity Tax Credit (COTC). The COTC would be refundable, allowing low-income families without tax liability to benefit. The report also suggests that a student's Pell Grant eligibility should be determined by tax-liability information already collected by the irs, freeing applicants from the Kafkaesque complexity that is the current application process.

Simplification is crucial, as Harvard economists Susan Dynarski and Judith Scott-Clayton have shown. Walls of paperwork and regulations obscure aid and tax-benefit options, especially to students whose parents are not college-educated or whose primary language is not English, making the system even more regressive in effect than it is by design.

The TPC proposal would add an annual $8.5 billion to the federal government's investments in student aid, with 63 percent of this increase flowing to households with less than $20,000 in adjusted gross income. A significant part of the funding could be found by reforming an inefficient part of the current aid system: federal student loan programs. The government currently sponsors two competing programs, one through which students and parents borrow money directly from the government, and one where the government guarantees and subsidizes a loan from a commercial bank. For borrowers, these products are identical. For the government, however, the so-called guaranteed loans are more expensive. Analyzing President Bush's proposed budget for 2007, Kate Sabatini and John Irons of the Center for American Progress find that if the government stopped subsidizing commercial banks and provided all of next year's student loans directly, as much as $5.6 billion could be saved. And that's after the hike in student loan interest rates that House Majority Leader John Boehner and his bank lobby friends pushed through Congress in February. Here's hoping the next Congress has done different math.